Unions pressure Biden administration not to change EV tax credit rules

WASHINGTON, Jan 20 (Reuters) – Major unions and environmental and public interest groups are urging President Joe Biden to reject efforts by the European Union and other foreign governments to review tax incentives for electric vehicles in the United States.

The $430 billion US Inflation Reduction Act (IRA) passed in August restricts consumer tax credits of $7,500 to electric vehicles made in North America, but the US Treasury. The US said in December that consumers who lease vehicles assembled outside of North America could benefit from the $7,500 commercial green vehicle tax credit.

Foreign governments have been pressing the Biden administration to do more to expand credit eligibility.

“The IRA has the potential to be a game changer for industrial cities hardest hit by decades of relocation,” said a public statement from the United Auto Workers, International Association of Machinists and Aerospace Workers, United Steelworkers, Sierra Club and Public Citizen.

“We strongly urge you to ensure the IRA is implemented as planned, without delays or technical changes that erode its promises to American workers and climate goals,” he said.

The White House had no comment on Friday’s letter, but noted Biden’s remarks in September that said the IRA bill would create “good-paying union jobs” and “increase energy security.”

The EU ambassador to the United States, Stavros Lambrinidis, told the Washington auto show on Thursday that he was concerned about the “discriminatory” provision of the electric vehicle tax credit, arguing that it means American consumers “will have far less options on what they can buy” that can receive the $7,500 credit.

“You can go green without discrimination,” Lambrinidis said.

The letter rejected the suggestion by foreign governments that tax incentives for electric vehicles violate World Trade Organization and free trade rules. “Outdated trade rules should not be used to undermine our laws intended to support a growing clean energy economy,” the letter said.

In December, the EU praised the US Treasury Department’s decision to allow electric vehicles rented by consumers to qualify for up to $7,500 in clean vehicle business tax credits.

South Korea, Europe and some automakers requested Treasury approval in December to use the commercial electric vehicle tax credit to boost consumer access to electric vehicles.

Reporting by David Shepardson Editing by Bill Berkrot

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